China’s Stock-Index Futures Fall as Oil Gains on Syria Concerns
China’s stock-index futures fell as oil prices jumped amid concern the U.S. will take military action against Syria.
Futures on the CSI 300 Index (SHSZ300) expiring in September lost 0.3 percent to 2,329.80 as of 9:15 a.m. local time. PetroChina Co. (601857), the nation’s biggest oil company, will resume trading today after the company said three senior managers resigned and were under investigation by authorities. CSR Corp. and China CNR Corp. (601299), the biggest train makers, may decline after posting lower profit. Air China Ltd. (601111), the nation’s largest international carrier, may advance after reporting higher net income.
The Shanghai Composite Index (SHCOMP) climbed 0.3 percent to 2,103.57 yesterday, paring this year’s loss to 7.3 percent. The CSI 300 Index rose 0.2 percent to 2,340.88. The Hang Seng China Enterprises Index (HSCEI) retreated 0.9 percent. The Bloomberg China-US Equity Index fell 1.6 percent in New York.
The MSCI Asia Pacific Index dropped 1.1 percent today, while crude rose to an 18-month high as the U.S., France and Britain stepped closer to a military strike against Syria after concluding the regime used chemical weapons against civilians.
The Shanghai Composite is valued at 8.5 times its projected 12-month earnings, compared with the five-year average of 12.7 times, according to data compiled by Bloomberg. Trading volumes in the index were 27 percent higher than the 30-day average yesterday, according to data compiled by Bloomberg.
PetroChina said in a statement yesterday the three managers, including top executives at two units, are “currently under investigation by relevant PRC authorities.”
The three are Li Hualin, chairman of Kunlun Energy Co., an oil and gas producer and distributor; PetroChina vice president and general manager of its biggest oilfield, Ran Xinquan; and Wang Daofu, chief geologist for PetroChina.
“It is unclear whether the issues under investigation are of a purely personal nature or related to the managers’ respective duties at PetroChina,” Citigroup Inc. analysts wrote in a report. “We expect sentiment on the stock to be weak as long as there is uncertainty over this issue.”
CSR and China CNR may decline. CSR said first-half net income dropped 24 percent from a year earlier while CNR said profit fell 5.4 percent.
Of the 178 Shanghai-listed companies that reported first-half earnings that Bloomberg tracks, 83 beat analyst estimates, 84 trailed and the rest were in line. Chinese publicly traded companies are required to release first-half reports by the end of August.
Air China may advance. The carrier said first-half profit rose 10 percent from a year earlier as currency gains from a stronger yuan and income from its stake in Cathay Pacific Airways Ltd. helped offset lower fares.
In New York, Chinese solar stocks fell, with LDK Solar Co. tumbling the most in three months after its cash balance dropped to the lowest level since 2009 and second-quarter sales sank 51 percent. China Southern Airlines Co. widened the discount to its Hong Kong shares after reporting an operating loss.
--Zhang Shidong. Editors: Allen Wan, Richard Frost
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